Workers Rely on 401(k) Providers for Retirement Advice: Cerulli

Perhaps this rapid decline is because as people age, more of them rely on a financial advisor or a financial planner.

Among participants under 30, just 9% rely on a financial advisor and 6% rely on a financial planner. In contrast, 20% of the over-70 crowd relies on an advisor and 19% rely on a planner.

The study also finds that there is some dissatisfaction among plan participants and their providers — especially among those on the cusp of retirement, in the 50-to-59 age range.

“Investors ages 50-59 are facing a crucial juncture in their retirement planning journey, yet are most likely to report dissatisfaction with their current providers,” according to Cerulli. Scott Smith, director at Cerulli, told ThinkAdvisor that this disappointment provides an opportunity for wealth managers.

“The main challenge of the 50-to-59 market is that they are finally taking retirement planning seriously and many find themselves disappointed  with regards to what their current saving will generate in retirement income as well as what they will need to do to remedy the situation in the next 10 to 15 years,” he said.

According to the Cerulli report, providers targeting this 50-59 age segment must reinforce the satisfaction of their current advice recipients. The report also cites this as an opportunity for providers to recognize how easy it can be for their clients to change providers if they are engaged in outreach efforts.

“The disappointment of these investors creates an opportunity for wealth management providers to displace incumbents, but to meaningfully impact investor outcomes they will need [to] install themselves as long-term financial coaches instilling a strong savings discipline among investors,” Smith told ThinkAdvisor. “It’s not easy or short term but could prove fruitful for both investors and wealth management providers.”

— Check out How Alicia Munnell Messed Up, and Then Saved, Her Retirement  on ThinkAdvisor.